Every homeowner’s dream is to be able to pay off their mortgage and live in a free and clean home. Many homeowners don’t even think about paying off their home loan and think it’s nearly impossible for anyone to own a home without a mortgage. However, there are people who have goals and try very hard to achieve the goal of paying off their mortgage. Homeowners who complete the arduous task of paying off their mortgage do deserve bragging rights and that’s an impressive goal and accomplishment. Very few and proud homeowners who pay off their mortgage loans need to ensure that after making the last mortgage payment of their home, that the lien on the property has been removed from title by their mortgage lender so that in case they need to sell their property at any given time , there will be no bureaucracy. All FHA Loan programs require escrow for property taxes and homeowners insurance so once the mortgage loan is paid off, the escrow requirements for your property taxes and insurance will be the responsibility of the homeowner.
Things You Should Know About Paying Off Your Mortgage Before Final Payment
As you approach your final mortgage repayment line, there are a few things you should know about paying off your mortgage before your final mortgage payment is due. One of the things you should do is ask your mortgage lender for final payment figures 45 to 60 days before your last and final mortgage payment. Homeowners need to understand that mortgage borrowers are paying their mortgage loan payments in arrears and because they are paying in arrears, homeowners may actually owe more on the mortgage balance than they think they owe. For example, if a homeowner has a mortgage payment due this month and they’re making the payment now for this month, this month’s payment includes the previous month’s principal and interest payments. The flower clock is always ticking, day or night. Interest is added on every minute of every day. If you’re one of those homeowners who’ve paid extra housing payments than the monthly minimum, you’ll be surprised to learn that you owe a lot less than you thought you owed.
How Do You Pay Off Your Mortgage?
Homeowners with mortgages have mortgage loan providers servicing their mortgage loans. The responsibility of the lender and the scope of their work is to ensure that the borrower’s accounting records, including escrow, are accurate and that monthly reports are submitted on time and that the payments made by the borrower are properly recorded. When a homeowner requests payment on a mortgage loan, the mortgage lender is the agent that processes the payment statement to the homeowner or the mortgage lender requesting payment on behalf of the borrower. Upon request for payment by the borrower, the lender must prepare the correct payment figures and ensure that a payment letter is sent to the borrower or the borrower’s power of attorney within seven days of the payment request. The lender will state the loan repayment date will be good until and if that date is passed, there will be additional daily mortgage interest that will accrue. There are costs and fees in paying off a mortgage. In addition to the final principal and interest payments, the borrower will need to pay a listing fee to the county registrar’s office to release the mortgage lien for the property title. Mortgage lenders may also have additional fees and charges such as processing fees, wire transfer fees, unpaid fees, and late fees if applicable.
Release of Escrows When You Pay Off Your Mortgage
There are other duties that mortgage lenders require when you pay off your mortgage. Most borrowers will have an escrow account with their loan service company. When you pay off your mortgage, the escrow account also needs to be closed. One of the roles of a mortgage lender is to keep your property taxes and homeowners insurance and pay them when they fall due. Since the lender will no longer service your mortgage loan, they must close your escrow account and return the remaining funds held in your escrow account within 20 days of your loan payment and need to zero and close your escrow account. Make sure you get confirmation of your escrow account closing and check with your homeowner’s insurance company and county property tax division to make sure they have the right address to send your future insurance bills and property tax bills due. Get the exact due date so you’re not late and aren’t assessed for late payment fees or risk your home being uninsured. Automatic online payment arrangements are a good way to ensure that your bills will be paid on time but make sure you have sufficient funds in your bank account.
When Do You Get a Free and Clear Title for Your Home
Many homeowners think that just because the lender shows a zero balance statement on your mortgage that you own your home for free and clear. This is not the case. You will only have free and clear title to your home when the county registrar’s office records a release request. This can take a few days to a few weeks. You officially own your home for free and clean when you physically obtain a copy of the release showing the recording date as well as the identification document number from the county registrar’s office. There are several ways you can get this release. You can have it mailed to you or you may have the option of picking it up at the county registrar’s office.
When you contact the homeowner’s insurance company to let them know that you’ve paid off your mortgage, make sure you tell the insurance company that the lender is no longer covered by additional coverage and ask them to remove their name from your homeowner’s insurance policy. Your homeowner’s insurance company may ask for a recorded copy of your release request as well as a copy of your deed.